Sustainability in the textile industry: a quantitative analysis of the role of supply chain disclosure and supply chain complexity

Official URL: http://ieomsociety.org/proceedings/2022istanbul/100.pdf

Sustainability has become an important issue on corporate agendas and firms are increasingly being held responsible for not only their own actions, but also the actions of other firms in the supply chain. In line with this, firms aiming to be more transparent about their sustainability practices started to voluntarily reveal their supplier lists to the public, which might include information such as the company name, product type, location, factory demographics (e.g. gender distribution, firm size), audit reports and sustainability grading of suppliers. This exploratory study aims to investigate the impact of the extent of supply chain disclosure on firm performance, by focusing on the textile industry. The role of supply chain complexity as an antecedent of supply chain disclosure is also examined by focusing on its two dimensions: horizontal complexity (i.e. the number of suppliers) and spatial complexity (i.e. geographical spread of suppliers). Data is collected from secondary sources using supplier lists published on company websites and ORBIS database. Hypotheses are tested via hierarchical regression analysis. The results suggest that supply chain disclosure has a positive impact on financial performance. The findings also indicate that supply chain complexity has a negative impact on the extent of supply chain disclosure.